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PEPSICO’S SUSTAINABLE STRATEGIES

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Journal of Management (JOM)
Volume 6, Issue 2, March – April 2019, pp. 81–83, Article ID: JOM_06_02_010
Available online at http://www.iaeme.com/JOM/issues.asp?JType=JOM&VType=6&IType=2
ISSN Print: 2347-3940 and ISSN Online: 2347-3959
PEPSICO’S SUSTAINABLE STRATEGIES
Sandeep Sehrawat
Official Address: Assistant Professor, Satyawati College [Evening], D.U.,
Ashok Vihar, Phase-III, Delhi, India
ABSTRACT
The concept of sustainable development is a well-acknowledged business
principle. Amid the intensifying consciousness of the potential impressions of
organisations on the environment, companies of all types and sizes have begun
instigating environmental sustainability initiatives into their structural frameworks.
Key words: Non-institutional investors, investment patterns, Investment objectives,
Investment determinants
Cite this Article: Sandeep Sehrawat, Pepsico’s Sustainable Strategies, Journal of
Management, 6(2), 2019, pp. 81–83.
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1. INTRODUCTION
Firms seeking sustainability have introduced programs that are bent on mitigating the adverse
effects of their business processes on the environment. PepsiCo is one of the enterprise that
have sustainable management practices that enable its executives to effectively drive a
sustainable culture.
2. STRATEGIES IN PEPSICO
Undoubtedly, PepsiCo cultivates sustainability right from its employee culture. PepsiCo is
using its human resource department as a tool to integrate the concept of sustainability into
the firm’s culture (PEPSICO, 2015). The establishment inspires sustainability from the
procedures of hiring employees, training them, and providing employee welfare packages.
PepsiCo hires only qualified candidates, who are then trained on sustainable business
practices (PEPSICO, 2015). This creates a sense of belonging, which is further cemented by
the presence of an employee welfare package. As a result, PepsiCo’s employees are always
motivated to work harder; mirrored in the high quality of the company’s products. In addition
to a sustainable employee culture, PepsiCo also engages in ecological manufacturing practices
like (but not limited to): diverting its waste from landfills, reducing its greenhouse gas (GHG)
emissions and organic packaging. Additionally, PepsiCo’s executives efficaciously drive a
sustainable culture by the reduction of water usage per unit of beverage production, climate
protection, empowering women, and sustainable farming initiatives (SFIs) (PEPSICO, 2015).
In this regard, PepsiCo can be referred to as a “sustainable company” because it engages in
organisational practices that are characteristic of an ecologically conscious company.
Above and beyond the sustainable management initiatives that PepsiCo has in play, there
are other feasible strategies it can successfully employ. It is important to take note of the fact
that PepsiCo is majorly engaged in a sustainable “resource management” type of strategy
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Pepsico’s Sustainable Strategies
because its good manufacturing practices (GMPs) are aimed at saving natural resources like
water, food (SFIs) and energy. Nonetheless, PepsiCo can also engage in sustainable
stakeholder management as a strategy. Using this management approach, PepsiCo can review
the feasible option of adding value to the company’s shareholders, investors, suppliers, and
general business management. This entails generating value-added supply chains, risk
assessment, and many other avenues of spawning organisational stakeholder sustainability
(Smith, 2014).
In addition to this strategy, a company can also use a sustainable governance management
strategy. This includes activities like reporting on the true financial position of a company,
auditing and risk management. Moreover, this can also involve the integration of
“megatrends” into an organisation’s culture of strategic management planning (Rosenberg,
2015). What’s more, a company can also use core capabilities as a sustainable management
strategy. To this effect, an organisation can guarantee sustainability by engaging valuable
business models that are driven by concepts of organisational sustainability. Normally, there
are four sustainable company management strategies a company can employ: core
capabilities, governance, stakeholder and resource management strategies. Relevant to
PepsiCo’s scenario, the executives of the enterprise can employ any (or a combination) of
these sustainable management strategies to effectively drive a sustainable organisational
culture.
The likelihood of success with these sustainable management strategies is entirely
dependent on the operative execution of the preferred strategies. There is a high chance of
success if the management strategy is integrated into business planning and decision making,
including product research and development, new manufacturing methods, and acquisition of
new human resource. Additionally, there are high chances of success if the environmental
risks associated with a company’s product life cycle are identified, assessed, and
appropriately managed (Smith, 2014). This is to diminish the chances of the sustainable
management strategies to fail. Also, the strategic management plans have high chances of
success if they comply with all pertinent regulatory and legal requirements (Rosenberg,
2015). With this achieved, there will be no legal hurdles in executing the effective
management approaches.
What’s more, the success of any of these management strategies is dependent on
assurance programs that audit and asses the usefulness of the strategic management
approaches with regard to good manufacturing practices and program goals. Additionally,
there is likelihood for success of the management strategies if an annual report summarizing a
company’s environmental activities is prepared and made public. If there is an improvement
after the integration of relevant management approaches, then it will be mirrored in an
organisation’s annual environmental sustainability accounts (Smith, 2014).
3. MEASURES OF SUSTAINABLE STRATEGIES
So how can the success of these sustainable management strategies are measured? It is the
opinion of Rosenberg (2015) that the primary goal of a company seeking sustainability is to
maximize value creation while minimizing resource consumption. In this regard, the first way
of measuring the effectiveness of a sustainability management strategy is to measure the ratio
of resource consumption to value creation. If the strategy is successful, then more value will
be created with the utilization of minimal resources. On the other hand, if the strategy is
unsuccessful, more resources will be used to create minimal value in the form of decreased
revenue, customer satisfaction, economic value added, business competence, and many more
other indicators of business value (Rosenberg, 2015). The second way of measuring the
effectiveness of a management strategy is to determine whether it considers environmental,
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Sandeep Sehrawat
economic, and societal aspects of business. A successful sustainability management strategy
cannot be one that strictly evaluates either the environmental, economic, or societal aspects of
performance. A successful strategy should evaluate all the three aspects of organisational
performance because they are all responsible for the success of an enterprise.
Third, an efficient management strategy can be measured by its consideration of each
stage in the product life cycle. A successful management plan is one that ensures the entire
product life cycle is covered. An otherwise successful strategy can stall if it reaches a point
that was overlooked in the product life cycle (Rosenberg, 2015). Therefore, a successful
strategic management strategy encompasses the entire product life cycle of an organisation.
Also, a successful sustainable can be measured by its consideration of the potential factors
that can improve future organisational performance. A successful management strategy
considers the potential areas of business improvement, which can be exploited so as to create
more business value in the future (Smith, 2015).
4. CONCLUSIONS
Bearing in mind that the 21st century business landscape changes rapidly, there is a likelihood
that these management strategies will change in the future. Business values, concepts,
principles, knowledge and skills are born each and every day. Therefore, there are very high
chances that these management strategies will be more intricate because of the rapid
progression of technology, knowledge, research, and the ways in which people do business. In
the future, business executives will need a broader knowledge and skills base to appropriately
equip them with the competence to look at societal problems from a completely different
perspective. Hence, these strategies will become more complex to cater to the needs of a
rapidly developing business and economic landscape of the 22nd century.
REFERENCES
[1]
PepsiCo (2014), “PepsiCo Sustainability Initiatives delivered more Than $375 Million in Estimated
Cost Savings Since 2010”, http://www.pepsico.com/live/pressrelease/pepsico-sustainabilityinitiatives-delivered-more-than-375-million-in-estimated-09242015 (Accessed on December, 2016)
[2]
Rosenberg, M (2015), “Strategy and Sustainability”
[3]
Smith, B (2014), “Organisational Change for Corporate Sustainability”
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